The Gift That Keeps on Taking

Obamacare is primed for defeat -- or else it defeats us.

By David Hogberg – 12.21.11

If you need a last minute gift for that health-care policy wonk on your Christmas list, you cannot go wrong with Why ObamaCare Is Wrong for America by Grace-Marie Turner, James C. Capretta, Thomas P. Miller, and Robert E. Moffit. The book is written in such a lucid, down-to-earth style that it makes an excellent gift even for the person who is only marginally interested in health care.

Turner, Capretta, Miller, and Moffit were vigorous participants in the debate over Obamacare, and had the powers that be listened to them we wouldn't be facing the burgeoning mess that we are. As Obamacare inevitably results in one disaster after another, having Why ObamaCare Is Wrong for America on your bookshelf will serve as an excellent reference for understanding why the disasters unfold the way they do.

While the whole book is well worth reading, two chapters stand out.

The first is "Impact on…Taxpayers," which recounts not only how Obamacare will burden taxpayers but also the accounting ruses used to give the appearance that it won't bust the budget. There are at least two cases in Obamacare of "bracket creep," where inflation pushes incomes into higher tax brackets. Starting in 2018, Obamacare levies a tax on "Cadillac" health plans costing over $18,000 annually. While the tax is adjusted each year for inflation, health insurance almost always rises at a rate higher than inflation, meaning that over time more and more families will see their health plans subject to the tax. The second is a surtax on annual incomes for individuals making over $200,000 annually and $250,000 for families. The surtax amounts to 0.9% on wages and 3.8% on non-wage income. Yet the tax rate is not adjusted for inflation, so each year more and more taxpayers will be ensnared by it.

But those are only the taxes that are actually in the law. As the authors note:

ObamaCare is going to push government spending up even more than [the] best-case scenario numbers show, and the result will be to force even higher taxes on future generations of Americans. That becomes clear only when all of the gimmicks and unlikely assumptions that are hiding ObamaCare's true costs are stripped away.

The first gimmick entailed keeping the "10-year cost" of Obamacare to about $1 trillion. To achieve this, the law contained 10 years of taxes with six-years of costs. That is, while the taxes for Obamacare began in 2010, the cost of supplying subsidies for insurance does not begin until 2014. It was this dishonesty that enabled supporters of the law to espouse the canard that it reduced the deficit by $118 billion. The truth is the first 10 years of supplying insurance subsidies, 2014-2023, will leave taxpayers with a $2.3 trillion bill.

Another gimmick is "double counting." Obamacare does this at least twice. It cuts Medicare benefits about $450 billion over a decade to help pay for the insurance subsidies. But the Obama administration and Democrats also claimed that the savings would replenish the Medicare trust fund. That proved too much even for a Congressional Budget Office that, at the time, was in a Congress still controlled by Democrats. In a December 2009 report, the CBO "let it be known that the Medicare cuts couldn't be double-counted. Either they will pay for a new entitlement, or they will shore up Medicare. But not both."

Obamacare pulled the same trick with the Community Living Assistance Services and Supports program, aka the "CLASS Act." The CLASS Act was intended to be a program that provided long-term care insurance. It was supposed to collect $70 billion in premiums before any benefits were paid out. But "ObamaCare's authors could not resist the temptation to double dip. They set aside the premiums to pay for long-term care insurance claims, but they also counted the premiums to pay for ObamacCare's overall insurance expansion." In the end, there will be no $70 billion for either purpose. The CLASS Act proved to be such a Ponzi scheme that Obama's Department of Health and Human Services eventually admitted that there was no way to make the program work.

The chapter "What You Can Do to Put the Brakes on ObamaCare" provides citizens with useful tools to keep the debate going into the 2012 election. President Obama and the Democrats will hope that Obamacare drops off the political radar next year. The chapter offers ways that people who are not politicians or pundits can prevent that from happening, such as calling in to talk-radio programs, writing letters to the editor, or starting a Facebook page dedicated to discussing the problems of Obamacare. And for the very ambitious, the chapter urges you to consider running for office. Of course, you can't go into the debate unarmed, so the chapter offers ten basic facts about Obamacare that you can memorize.

And if you need more, well, that's what the rest of the book is for.

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